Amit, Balan and Chander were partners in a firm sharing profits in the proportion of 1/2 , 1/3 and 1/6 respectively. Chander retired on 1-4-2014. The Balance Sheet of the firm on the date of Chander’s retirement was as follows
Balance Sheet of Amit, Balan and Chander as on 1-4-2014
| Liabilities |
Amount |
Assets |
Amount |
| Sundry creditors |
12,600 |
Bank |
4,100 |
| Provident fund |
3,000 |
Debtors 30,000
Less: Provisio 1,000
|
29,000 |
| General reserve |
9,000 |
Stock |
25,000 |
Capitals:
Amit 40,000
Balan 36,500
Chander 20,000 |
96,500 |
Investments |
10,000 |
|
|
Patents |
5,000 |
|
|
Machinery |
48,000 |
It was agreed that:
(g) Goodwill will be valued at Rs.27,000.
(h) Depreciation of 10% was to be provided on machinery.
(i) Patents were to be reduced by 20%.
(j) Liability on account of Provident Fund was estimated at Rs.2,400.
(k) Chander took over investments for Rs.15,800.
(l) Amit and Balan decided to adjust their capitals in proportion of their profit sharing ratio by opening current accounts. Prepare Revaluation Account and Partners’ Capital Accounts on Chander’s retirement.
